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ANZ Smart Choice Super report: September 2019


Published November 2019

Continuing strong performance for members

ANZ Smart Choice Super Lifestage investment options' performance (%)

Note: The graph above shows how your investment option (based on your decade of birth) has performed over the past year. Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance. 

* The inception of the 2000s fund was on 18 February 2017 so there is no performance data available for three and five years. 

 

Investment Option

3 months

1 year

3 years (p.a.)

5 years (p.a.)

1940s

2.28

7.99

5.60

5.16

1950s

2.35

8.41

6.49

6.25

1960s

2.43

8.59

7.99

7.42

1970s

2.56

8.79

9.23

8.33

1980s

2.63

8.91

9.84

8.81

1990s

2.63

8.83

9.97

8.89

2000s

2.57

8.62


Note: The table above shows how your investment option (based on your decade of birth) has performed in the September 2019 quarter, and over the past one, three and five years. Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance. 

* The inception of the 2000s fund was on 18 February 2017 so there is no performance data available for three and five years.

 

Smart Choice Super’s Lifestage investment options have continued to perform strongly for members over the year to September with returns ranging between around 8% for the more defensive funds to around 9% for the more growth orientated options.  The solid returns have been broadly based, driven by double digit gains in the Australian share market, and global property and infrastructure, along with fixed interest. Please read below for a market and economic snapshot of the quarter.

According to the latest SuperRatings survey of superannuation returns, the majority of our Lifestage investment options (1950s to 2000s) outperformed the median of all MySuper default options in the September quarter. 

The SuperRatings survey also groups funds together with similar allocations to growth assets. Within these sections of the survey, returns have been consistently strong over the year to 30 September, with our Lifestage investment options from 1940s to 1990s performing in the top quartile. Similarly, over five years, returns for our 1970s, 1980s and 1990s Lifestage investment options have returned more than 8.0%, well above the median manager.

ANZ’s Chief Investment Officer, Mark Rider, said “Smart Choice Super continues to perform well for our members. While challenges abound from trade wars to Brexit, investor returns have remained solid and have been supported by further central policy support from the US Federal Reserve and the Reserve Bank of Australia.  However, following a decade of solid returns post the global financial crisis, the headwinds for investor returns have strengthened with the risks to global and Australian growth into 2020 now much more elevated.”

 

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1940s

2.28

7.99

5.60

5.16


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance.

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1950s

2.35

8.41

6.49

6.25


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance.


Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1960s

2.43

8.59

7.99

7.42


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance.


Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1970s

2.56

8.79

9.23

8.33


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance.


Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1980s

2.36

8.91

9.84

8.81


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance.


Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

1990s

2.63

8.83

9.97

8.89


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance.


Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

2000s

2.57

8.62


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. Please note that all returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance. 

* The inception of the 2000s fund was on February 18, 2017 so there is no performance data available for three and five years.

Diversification is important

Diversification is fundamental to ANZ’s dynamic lifestage investment philosophy, which is used to build a portfolio across assets including Australian and international shares, cash, property and fixed interest securities, based on your age and time to retirement.

Returns across life-stages explained

Younger members continued to receive higher gains because they are more heavily invested in ‘growth assets’ such as shares. These assets tend to earn the highest returns, but as markets can also fall, it is possible for investors (that is, super fund members) to lose out when they do. For younger members, there’s time to recover from periods of volatility, whereas that may not be the case for older super members.  

Smart investments tool

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ANZ Smart Choice Super choose your own investment mix performance (%)

Similarly, returns for Smart Choice Super’s ‘choose your own investment mix’ were also positive, with global property the best performer over the quarter and year. International shares (hedged) and cash performed less robustly, due to the lower Australian dollar and the Reserve Bank of Australia’s (RBA) lowering of its target cash rates in both July and October, respectively. 

Members of ANZ Smart Choice Super for employers and their employees can access the latest returns across the full suite of investment choices online or by visiting the ‘Investment portfolio’ page via their ANZ Smart Choice Super account in ANZ Internet Banking.

 

Investment Option

3 months

1 year

3 years (p.a)

5 years (p.a.)

Australian fixed interest^

1.59

8.92

Australian shares

2.55

12.28

11.34

9.21

Cash

0.25

1.28

1.35

1.59

Conservative

1.93

7.12

4.78

4.59

Global fixed interest

2.12

8.50

2.82

3.96

Global property

6.33

13.07

6.01

8.70

Global smaller companies

3.00

1.22

10.92

Growth

2.46

8.45

8.37

7.74

International shares (hedged)

1.14

1.49

9.81

8.11

International shares (unhedged)

4.32

8.32

13.43

Moderate

2.33

8.23

6.64

6.41


Note: Returns quoted use the unit price which is calculated using the net asset values for the relevant month end. All returns are after the deduction of investment fees. Reporting data is to 30 September 2019 (p.a. = per annum). Past performance is not a reliable indicator of future performance. The above investment returns are not applicable to QBE members. These members can access their individual returns via ANZ Internet Banking.

^ The ‘Australian fixed interest’ fund’s inception was on 18 February 2017 and therefore the three and five-year performance data is not available.
The ‘global smaller companies’ and ‘international shares (unhedged)’ funds started on 25 May 2015 so the five-year performance data is not available. The ‘global smaller companies’ investment option is not available to members of ANZ Smart Choice Super and Pension.

Market and economic snapshot

Economic data released during the September quarter showed the global slowdown continues particularly across the industrial and trade sectors, while services and the consumer remained solid.  However, more monetary policy easing from the US, Europe and Australia helped reduce recessionary risks and supported equity markets.  US-China trade tensions, Brexit uncertainties and a brief inversion of the US yield curve (which if sustained is often a reasonable indicator of recessions some 12 or so months down the track) sent share markets down in August, from the positive gains in July, followed by a recovery in September. 

The US Federal Reserve cut official interest rates by 0.25% in both July and September in an effort to boost economic growth.  US housing has responded positively to lower rates although other indicators like expected capital expenditure and industrial sector survey evidence have continued to slow in line with slower global growth The House-led impeachment inquiry into President Trump began in late September. Senate support remains unlikely at this stage, but the issue remains fluid.   

The RBA also lowered its target cash rate by 25 basis points in both July and October to a record low of 0.75%.  According to RBA Governor Lowe, "The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector should all support growth." The market continues to expect further cuts in coming months as inflation remains well below target and the unemployment rate is moderately elevated. 

In response to weaker European economic growth and outlook, in particular a slowing manufacturing sector, the European Central Bank reduced interest rates, reintroduced quantitative easing and committed to ongoing asset purchases until it achieves its inflation target. 

The Brexit saga continued as the UK’s suspension of Parliament by Prime Minister and Brexit-advocate Boris Johnson was ruled unlawful. A general election and Brexit delay seem likely. Despite this, UK equities gained 1.0% over the quarter supported by attractive valuations and prospects of some resolution of the Brexit impasse.

The US-China trade war continued, with the US imposing a further 15% tariff on an additional USD112bn of Chinese exports in September. Continuing high-level trade talks are scheduled for October, with President Trump saying that a trade deal could happen “sooner than you think”.  If not, further tariffs are due to be imposed by year end, which will adversely impact the global economy. While prospects for an interim trade deal have improved (likely reflecting slower growth), we consider any deal will be a stop gap with tensions extending well into the future.  

In China, the economy slowed with the outlook remaining subdued given a weak external environment. Industrial production grew at 4.4%, down from around 7% at the start of 2018 and retail sales also slowed to 7.5% from close to 10% in early 2018. Reflecting the headwinds to global trade and manufacturing, emerging market equities underperformed -1.9% over the quarter.

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OnePath Custodians Pty Limited (OnePath Custodians) ABN 12 008 508 496, AFSL 238346, RSE L0000673 is the trustee of the Retirement Portfolio Service (ABN 61 808 189 263, RSE R1000986) (Fund) and issuer of the interests in “ANZ Smart Choice Super”, a suite of products consisting of ANZ Smart Choice Super, ANZ Smart Choice Super for employers and their employees and ANZ Smart Choice Super for QBE Management Services Pty Ltd and their employees.

ANZ Smart Choice Super is issued by OnePath Custodians, and the ANZ Smart Choice Super and Pension product is distributed by Australia and New Zealand Banking Group Limited (ANZ) (ABN 11 005 357 522). ANZ is an authorised deposit taking institution (Bank) under the Banking Act 1959 (Cth). OnePath Custodians is the issuer of this product but is not a Bank. Except as described in the relevant Product Disclosure Statement, the obligations of OnePath Custodians are not deposits or liabilities of ANZ or its related group companies. None of them stands behind or guarantees the issuer or the capital or performance of any investment. Such investment is subject to investment risk, including possible repayment delays and loss of income and principal invested. Returns can go up and down. Past performance is not indicative of future performance.

This information is subject to change. You should read the relevant ANZ Financial Services Guide (FSG), PDS, product and other updates (for open and closed products) available at ANZ.com.au/super and consider whether the product is right for you before making a decision to acquire, or to continue to hold the product. Updated information will be available free of charge by calling Customer Services on 13 12 87.

Taxation law is complex and this information has been prepared as a guide only and does not represent tax advice. Please see your tax adviser for independent taxation advice.

The information on insurance cover is a summary only of the terms and conditions applying to the insurance cover. To the extent there is any inconsistency with the terms of the insurance cover provided by the insurer, the terms of the insurance policy will prevail.

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